With government so involved in business, business cannot afford to sit on the sidelines. A recent Mercatus Center at George Mason University study explores the relationship between business political activity (lobbying and campaign expenditures) and business success, and finds that with few exceptions, lobbying isn't correlated with better business performance. The paper's findings must be viewed in light of an important factor driving companies' involvement in policy debates: the need to fend off distortive, ineffective, and costly regulations. This type of lobbying is not likely to generate profits.

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Paul Krugman, in today's New York Times, assures us that Dodd-Frank is working, despite claims to the contrary from critics all across the political spectrum. To make his case, Krugman points to consumer protection, resolution, and the designation of systemically important financial institutions. On each of these fronts, his defense falls short.